THE IMPACT OF FOREIGN TRADE ON ECONOMY GROWTH OF NIGERIA (1981-2022)

This study examined the impact of foreign trade on the economic growth of Nigeria using Gross Domestic Product (GDP) as a measure of economic growth. Foreign trade, which involves the exchange of goods and services across international borders, plays a significant role in the economic development of nations by promoting specialization, increasing productivity, creating employment opportunities, and improving revenue generation. The study focused on the relationship between foreign trade and Nigeria’s economic performance, particularly within the context of imports and exports. The study adopted a descriptive and analytical approach using secondary data obtained from relevant publications, journals, textbooks, and statistical reports. The theoretical foundation of the study was based on classical and modern trade theories such as the theory of comparative advantage and mercantilism, which emphasize the benefits nations derive from engaging in international trade. Empirical literature reviewed revealed mixed findings regarding the contribution of foreign trade to economic growth in Nigeria, with some studies indicating positive impacts while others identified challenges such as overdependence on imports, fluctuations in exchange rates, and poor export diversification. Findings from the study revealed that foreign trade contributes positively to Nigeria’s economic growth through increased export earnings, technological transfer, industrial expansion, and improved international relations. However, the study also discovered that Nigeria’s economy is highly dependent on crude oil exports, making the country vulnerable to external shocks and global price fluctuations. Furthermore, excessive importation of finished goods negatively affects local industries and domestic production. The study concluded that foreign trade remains an important driver of economic growth in Nigeria when properly managed. It therefore recommended that the government should diversify the export sector, encourage local production, improve trade policies, and provide adequate infrastructure to enhance the performance of the Nigerian economy.